Unprecedented climactic events, geopolitical unrest and seismic change, a cost-of-living crisis and economic volatility not to forget the elections coming up in many countries including Australia. As laptops were dusted off to begin the working year (hopefully following a refreshing break), it’s a turbulent context – this article zooms in on five key things to watch in reporting and audit. Make sure to sign up for our complimentary member update on 12 February, check out all our December period end resources, and 2025 accounting and audit conferences are now open for registration.

Sustainability reporting and assurance

As the fireworks rang out over Sydney Harbour and Federation Square on 1 January 2025, they weren’t just there for new years’ this time but a starter’s gun on one of the biggest changes to corporate reporting in Australia for decades: the introduction of mandatory reporting and assurance of climate risk disclosures. Now the nitty gritty work of what, how, who and when to report will play out at the coal face, no doubt with much learning and refinement needed on all sides – reporters, auditors, regulators and the legislation itself.

Key aspects to keep an eye on include firstly the assurance requirements in Australia currently being ironed out ahead of imminent release (New Zealand has deferred scope 3 GHG assurance to year 3). Keep an eye out for new and evolving reporting and assurance guidance from regulators and reporting and audit standards setters during the year.

Talent will continue to be a key focus as the new requirements put an even greater squeeze on auditors and reporters during the busy season. CA ANZ will continue to advocate for reform of the settings for non-listed Group 3 entities to make this more practical ahead of commencement in 2027, particularly for private entities where there are no material climate risks (estimated by the Government in its costings to represent 95% of the cohort).

The final piece for the sustainability reporting and assurance framework is the International Ethics Standard for sustainability reporting and assurance. IESBA approved the IESSA and other amendments to the Code of Ethics in December 2024 and local boards will be considering their adoption of these changes and local effective dates this year.

Financial Reporting

While not necessarily new things, there are some big moving parts in the financial reporting space this year with standards set for amendment or post implementation review. The IASB is consulting on targeted improvements to both the Equity Accounting and Provisions standards, undertaking their fourth agenda consultation, and will be conducting a Post Implementation Review on IFRS 16 Leases. CA ANZ will be advocating for practical issues particularly impacting SMEs to be addressed practically. Given the strongly held and sometimes polarised views on balance sheet lease accounting, there may be more fireworks ahead when this is opened for debate!

Audit standards and regulation

There’s also plenty happening for financial statement auditors. Firms continue to monitor and refine their systems of quality management, there’s a new standard for group auditors and New Zealand is considering whether it will adopt ISA for LCEs. On the horizon are the revisions to the Going Concern standard (the IAASB approved the revised standard in December) and the Fraud standard (expected to be approved in March).

Meanwhile debate continues in Australia on regulatory reform concerning audit firms and possibly across the financial reporting supply chain more broadly. Treasury is consulting on merging the standard setters and the FRC, the ongoing Treasury review into regulation of firms, recent Parliamentary inquiries and it’s an election year. With so many pieces, CA ANZ will be looking to whatever Government eventuates to bring this together and focus on sensible reforms that serve clear and needed objectives—sometimes challenging in a debate that is often emotive and heated.

Not for profit reporting reform

In Australia, work on the reform of the financial reporting framework for the not-for-profit sector has entered the final stages. The AASB is currently consulting on its General-Purpose Financial Reporting standard for Tier 3 entities, a major reform on which to have your say if you haven’t already. The AASB has also recommenced its project to develop a standard for reporting Service Performance Information.

In New Zealand, the new Tier 3 and Tier 4 reporting standards are coming into effect for reporting periods ending on or after 31 March 2025 and the new combined Tier 4 annual return for charities means that Tier 4 entities no longer have to prepare and file a separate performance report. Don’t forget that the Tier 3 reporting threshold has increased from entities with $3 million in expenses to $ 5 million). New Zealand Incorporated Societies also need to re-register under the Incorporated Societies Act 2022 if they want to continue to operate, so make sure societies you work with that haven’t already re-registered have a plan to do so.

Technology

The pace of technological innovation isn’t slowing down. While advances in technology offer businesses and auditors opportunities to improve efficiency and change how practitioners work, professional judgement and scepticism are more important than ever to avoid the potential pitfalls of overreliance on tech. CA ANZ and ACCA have released Audit and technology playbook: A practitioner’s guide to help auditors navigate changing technology. The IAASB has also published its Technology Position Statement, along with a series of non-authoritative guidance covering a variety of technology-related topics.

The question of whether this may be the year for digital reporting also comes to mind. Over the past six years, CA ANZ has laid out the case for digital reporting, surveyed members and investors and been working with stakeholders to elevate this often-forgotten issue. Momentum has been growing, with its inclusion in a recent Treasury consultation and many others now coming on board to support this important reform.